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Home Page Editorial
(September 9, 2003) 

From Publisher and Managing Editor's Desk... 

Topic - Wireless Carriers Find the Enterprise Ready Ahead of Consumers? 

There are indications from various reports that wireless carriers are slowly realizing that the key to exploiting wireless data is through the enterprise. We offer following comments on this realization :

1. Before we say anything else, we commend carriers to come to understand fundamentals of the enterprise wireless Internet marketplace. More later. 
2. All of us recognize that wireless carriers obtain major portion of their revenue stream from cellular voice. They see consumers as their main customer. They understand very well how to market to consumers through mass advertising and sales channel of retail chains and stores. The emphasis on cellular voice was rightly-placed. Nonetheless, wireless service providers should have realized that same strategy would not work with the enterprise as would work with cellular voice. Wireless data issues have very little in common with cellular voice, except the carrier infrastructure.  Components of a product or service should not determine the way you market the product or the service - that is marketing 101, we thought.
3. Having successfully targeted their subscribers with multitude of handsets with equally varied pricing plans, carriers made a strategic mistake in spending huge marketing and infrastructure dollars for consumer wireless data revenue. The return on this investment did not make accountants or investors happy. The size of market opportunity, however, somehow skewed the awareness among the strategists as to how long it will take to realize that opportunity. While we understand the natural temptation of carriers to increase ARPU from their subscribers, we have stated many times that there were a number of flaws in their strategy:
   1. First of all, consumers were not ready to adapt wireless Internet applications in a hurry.
   2. It takes a full generation for major changes in communications and entertainment life style of consumers. That's why, multi-media wireless applications, wireless games and picture messaging have not taken off in north America and Europe to the level that many research firms forecast. Japan and Asia were exceptions. So was SMS that was hugely successful in Europe in 2000-2002 and is catching up in North America. Even here, inter-carrier SMS switching continues to be a problem.  Until such time this continues to be a problem, the adoption will be slow. Carriers are now solving SMS inter-operablity problem.
   3. Initial pricing plans were not attractive for the value that these applications were delivering.
   4. External economic environment, including reverberations of 9/11 and Internet meltdown did not help carriers' cause.
   5. Consumer-based wireless e-mail is only marginally successful. See our comments further in this editorial on SME (Small Medium Enterprises) and wireless data applications. 
4. Against this scenario, wireless data in the enterprise had (and still has) a legitimate and valid business case but the carriers did not put required marketing emphasis. Carriers tried to be more than a data pipe to the enterprise. Enterprise customers were not willing to let carriers run their operational or even horizontal applications. Therefore, enterprise customers said no to the carriers.
5. Deploying wireless data applications in the enterprise is a complex undertaking. It requires interfacing with a number of technology infrastructures that are daunting even to experienced systems integrators. You also need to understand the business processes if you are to sell to the enterprise. Carriers never understood this complexity - nor were they willing to invest in learning, if they were serious in a few cases. Instead, they reacted by cobbling together a few partnerships here and there. As a result, their success was limited to horizontal applications.
6. Recently (past one year), carriers have demonstrated that they now understand that they can make money by selling to the enterprise  by offering their wireless network pipes as well as added-value horizontal application services, such as messaging. They have introduced bundled service packages (device, network adapters for the notebooks and handheld devices and network services). They have come up with attractive unlimited usage plans on per user or tiered usage basis. This takes the uncertainty away from IT planners. This bodes well for both the enterprise and the carriers. Better late than never. The carriers may find that this was their best decision in the wireless Internet area.

- Chander Dhawan 

Chander Dhawan - Your Site's Principal Consultant and Publisher